This is a blog by a former CEO of a large Boston hospital to share thoughts about negotiation theory and practice, leadership training and mentoring, and teaching.

Monday, March 25, 2013

Wrong approach, but it saves money for the state

Massachusetts is home to health policy researchers of the highest order. Some have pointed out the flaws and the unintended consequences of applying financial penalties to the rate of readmissions experienced by hospitals. Beyond Massachusetts, other researchers have pointed out the statistical meaninglessness of such comparisons. Nonetheless, the state government stubbornly insists on applying such penalties based on the experience of Medicaid patients.The MA Hospital Association is doing its best to reverse this action, but people on Beacon Hill don't seem to be listening. Here is the most recent MHA statement on this subject:

Reducing readmissions at hospitals is a goal
that every hospital in Massachusetts is committed to. Deliver high-quality care
with strong follow-up care and other proven strategies that involve patients and
their families and you may be able to prevent readmissions to a hospital.
But hospitals can’t control all the factors that can influence a readmission.

That is, a patient may be readmitted to a
hospital within days of his discharge, but for an ailment entirely unrelated to
the first admission. But these could be counted as a readmission under some measurement
approaches. Some readmissions are scheduled readmissions, but they too
could be counted. And some patients and their families even fail to follow discharge
instructions for taking medicine or avoiding certain foods, and wind up back in
the hospital. That’s counted as a readmission too and can result in payment penalties for the hospital.

Couple these pitfalls with the fact that
there is not a widely accepted tool for measuring readmissions, and you’re
left with ever-increasing penalties against providers for readmissions that are
hard to measure and over which they may have no control.

The FY2012 MassHealth acute hospital RFA contract between hospitals and
the state introduced a new preventable readmission penalty for certain hospitals
that MassHealth has determined to have higher-than-expected preventable readmission
rates. More than 20 hospitals were given a 2.20% reduction to their inpatient
reimbursement rate in FY2012. In FY2013, the administration increased the penalty
to 2.4%, 3.4%, and 4.4% for 31 hospitals. The penalty applies to all the hospital’s
discharges, not just readmissions. A score of cases can produce millions of dollars
in penalties to an already financially stressed hospital. The MassHealth penalties
can apply against hospitals that are doing a lot to address readmissions and which
deal with some of the most challenging patient populations. Add to these problems
the fact that MassHealth uses data that is several years old and doesn’t
reflect the current effectiveness of hospital efforts.

MHA opposes the original penalty as well as the increases and argues
that it is time to step back from the penalty mindset and look at a reasonable approach to readmissions.

“The current penalty is seriously flawed
from both a public policy and a methodological perspective. It unfairly punishes
hospitals without advancing the objective of reducing preventable readmission,”
said MHA’s Executive V.P. Tim Gens. “It may work as budget-cutting
initiative for the state, but it does little to promote better patient care. It
is clear that addressing readmission requires collaboration among the community
of participants in healthcare delivery – not arbitrary and punitive measures against hospitals.

“The application of this penalty across
all payments for inpatient services results in an unwarranted punishment that
is far greater than the amounts actually paid by MassHealth to the hospital for
the so-called ‘excess’ readmissions themselves,” Gens continued.
“The data the state relies upon to determine each hospital’s performance
is three years old, the methodology the state uses to identify preventable readmissions
has not been approved by the state’s own panel of experts, and it is clear
that hospitals do not control all of the factors that contribute to readmissions.”

In its budget letter to House Ways & Means
Committee Chairman Brian Dempsey (D-Haverhill), MHA has requested that
the House, in its FY14 budget proposal, direct MassHealth to use a more equitable
system for assessing penalties related to preventable readmissions; an appropriate
penalty would limit it to only those readmissions above the expected number calculated
by MassHealth. Hospitals exceeding the expected number would face up to a 75%
penalty for those readmissions that exceed the expected rate. MHA also believes
consideration should be given to hospitals that have made important advances in
reducing preventable readmissions by requiring EOHHS to limit penalties for those
hospitals that have shown demonstrable progress.

You can compare the HEDIS recommendations for outpatient pediatrics. You get dinged for parents who will not vaccinate a child fully or on time. If you are a practice that dismisses patients who will not vaccinate, your figures look good, but what happens to the patients? If you are practice that "works" with these patients and tries to get them vaccinated as fully as possible as soon as possible, you get dinged rather than rewarded.

Of course there are many such trials and tribulations we all work under as the measurers try to improve quality, which is a laudable goal. Some of the problem goes back to our own failings as hospitals and practices. The professions have not done enough in the past to improve safety and quality voluntarily, so we get the outsiders who don't do such a great job. And now of course we get the cost reducers as well.